Question

Compute Total Assets to Debt Ratio from the following information:
Particulars
Current Assets
Current Liabilities
Amount
4,00.000
1.00.000
Particulars
Shareholder's Funds
Non Current Assets
Amount
3.00.000
8.00.000​

Answer 1

Total asset to debt ratio = total debt/ total asset
Total assets = 400000+ 800000
=1200000
Total assets = shareholders fund + current liabilities + non current liabilities
1200000= 300000 + 100000+ non current liabilities
So non current liabilities = 800000

Ratio = 800000+100000/ 1200000
= 0.75 times